April18, 2018

Smith among 10 other senators who signed on to letter

WASHINGTON – U.S. Senators Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) led a bipartisan group of 13 senators in urging Environmental Protection Agency (EPA) Administrator Scott Pruitt to cease issuing so-called “hardship” waivers exempting obligated parties from the Renewable Fuel Standard (RFS). The senators also requested that the Agency provide topline information about the waivers already issued, disclose whether or not the agency redistributed the waived volume obligations among the non-exempted obligated parties and outline the agency’s plan to make the waiver process more transparent. Senator Tina Smith (D-MN) joined Klobuchar and Grassley on the letter.

“We are writing to you regarding the actions the Environmental Protection Agency (EPA) has taken to undermine commitments President Trump made on the Renewable Fuel Standard (RFS) to our constituents,” the senators wrote. “Recent reports indicate dozens of small refiner waivers have been secretly granted to large, multibillion-dollar companies under the guise of the small refinery hardship exemption provision in section 211(o)(9) of the Clean Air Act. This is extremely concerning to us.”

In their letter, the senators cited the confirmation hearing testimony of Pruitt, in which he stated, “Any steps that the EPA Administrator takes need to be done in such a way as to further the objectives of Congress in that statute, not undermine the objectives of Congress in that statute.” The senators also noted Pruitt’s October 2017 letter, in which he stated, “I reiterate my commitment to you and your constituents to act consistent with the text and spirit of the RFS. I take seriously my responsibility to do so in an open and transparent manner that advance the full potential of this program…”

News reports indicate that EPA has already issued 25 “hardship” waivers to large, multibillion-dollar refining companies making billions of dollars in profits since 2016. The senators state that such action would “represent a clear violation of your commitments and clearly undermine the President’s long-standing support of the RFS.”

For years, Klobuchar has led a bipartisan push for the EPA to release a stronger RFS to support American jobs and decrease dependence on foreign oil. In 2016, the former Administration released a stronger final rule for 2017. The new standard required a record amount of biofuel to be mixed into our transportation fuel supply next year. Minnesota’s twenty ethanol plants and three biodiesel plants generate roughly $5 billion in combined economic output and have made our state the fourth-largest ethanol producing state in the country.

In March, Klobuchar led a bipartisan group senators in urging the Administration to oppose any changes that would undermine the objectives of the RFS and hinder the growth of rural economies. In October, Klobuchar and Grassley led a bipartisan group of senators in a letter to the EPA calling for a strong RFS as the Agency worked toward finalizing its rule on biofuels volume requirements for 2018 under the RFS. In the letter, the senators urged the continued implementation of the RFS as intended by Congress and the release of a strong final rule that would give consumers more choices at the pump, strengthen the economy, and make the country more secure.

As a member of the Senate Agriculture Committee and a 2014 Farm Bill Conference Committee member, Klobuchar successfully pushed for key provisions in the current Farm Bill – including measures to support rural development projects, conservation programs, agricultural research, and the Rural Energy for America (REAP) program. Recently, her staff held public forums throughout the state to hear firsthand from Minnesotans about their priorities for the Farm Bill’s 2018 reauthorization. Klobuchar regularly does Rural Economy Tours across Minnesota, meeting with local leaders from the agriculture and business communities to discuss priorities for the 2018 Farm Bill and the economic impact of a stronger RFS.

The full text of the senators’ letter can be found below:

Dear Administrator Pruitt:

We are writing to you regarding the actions the Environmental Protection Agency (EPA) has taken to undermine commitments President Trump made on the Renewable Fuel Standard (RFS) to our constituents. Recent reports indicate dozens of small refiner waivers have been secretly granted to large, multi-billion-dollar companies under the guise of the small refinery hardship exemption provision in section 211(o)(9) of the Clean Air Act. This is extremely concerning to us.

During your confirmation hearing for the post of Administrator of the EPA, you said, “Any steps that the EPA Administrator takes need to be done in such a way as to further the objectives of Congress in that statute, not undermine the objectives of Congress in that statute.” You also wrote to a number of Senators in October 2017 and said, “I reiterate my commitment to you and your constituents to act consistent with the text and spirit of the RFS. I take seriously my responsibility to do so in an open and transparent manner that advances the full potential of this program…”

According to recent reports, the EPA has already issued 25 “disproportionate hardship” waivers to large, multi-billion-dollar refining companies reporting billions of dollars of profits since 2016. Such action would represent a clear violation of your commitments and clearly undermine the President’s long-standing support of the RFS.

These waivers fall well outside the bounds of the letter or spirit of this provision in the law, which sought to provide flexibility for the smallest of U.S. refiners, and only in cases of genuine hardship. Worse, EPA’s actions are already hurting biofuel producers and farmers across the United States at a time when farm income is at the lowest levels since 2006 and retaliatory trade measures from China threaten to deepen the crisis.

In 2015, 37 Senators wrote to the EPA requesting that the agency issue a strong Renewable Volume Obligation (RVO), citing the RFS’s success in driving economic development, strengthening agriculture markets, and creating hundreds of thousands of clean energy jobs in rural communities. Early reports indicate that the small refinery waivers you have granted could effectively cut biofuel demand by 1.5 billion gallons, thus effectively lowering President Trump’s commitment to seeing 15 billion gallons of ethanol blended to 13.5 billion. Additionally, once these select refiners are no longer responsible for complying with these 2016 requirements, they are able to sell excess Renewable Identification Numbers (RINs) back into the market, increasing supply and lowering the price.

This further reduces incentives for blending, slashing demand for biofuels and feedstocks, and hurting farmers and biofuels companies. These waivers could cripple the market for years to come, holding back homegrown biofuels while creating a windfall profits for large oil refiners -- the exact opposite of this administration’s promise to voters.

Perhaps most concerning, these lucrative waivers have reportedly been issued behind closed doors, outside of the public process, while the EPA has simultaneously been working with refineries to pressure President Trump to sign off on a RIN cap that would wreak further havoc on the RFS.

We request that you take the following actions immediately:

• Cease issuing any refinery waivers under the RFS;

• Provide a full list of the refiners that have received a refinery waiver in 2016, 2017 or 2018;

• Provide a detailed report to Congress describing EPA’s justification for providing the waivers and if the volumes were redistributed to other obligated parties; and

• Describe EPA’s commitment and plan to consider future small refinery waivers only during the annual RVO rulemaking process and commitment to provide full notice and opportunity for comment on any future small refinery waiver requests.